Local ride-hailing platform Grab wants to impose a 32¢ platform fee (inclusive of GST) on every ride to cover operating costs and the Competition and Consumer Commission of Singapore is currently conducting a public consultation to gather feedback on this proposed increase.

Why is there a need for a public consultation?

You might recall a little merger between Uber and Grab back in 2018 which resulted in a S$13 million fine on both companies and an order for Grab to maintain pricing at pre-merger levels.

This proposed platform fee would hence have to be approved by the CCCS before it can be implemented.

Why does Grab need a platform fee?

According to Grab, it invests "millions" annually sustaining and introducing new features to provide safe and secure rides.

In 2019, for example, Grab introduced over 80 new features, including Share My Ride which shares trip details and live GPS location, number masking, an in-app emergency button, and driver background checks.

Grab says that it intends to continue investing in safety features at the same pace for the next 12 to 24 months. It also intends to double the benefit coverage of Personal Accident Insurance for private hire vehicles from S$10,000 to S$20,000.

This requires money.

Grab also invests in initiatives that benefit its drivers. It recently extended its Driver Prolonged Medical Leave (paid medical leave for drivers who are unable to drive due to injury or illness) to all tiers in its Emerald Circle programme.

It also matches drivers' MediSave contributions up to S$100 per driver per month.

Drivers who wish to upskill or transit to another job receive training with Grab's partner-organisations. A career support portal was launched in June 2020 for this.

Grab says that one-third of the money collected from the proposed platform fee will go to funding these types of driver welfare benefits.

Is implementing a platform fee normal practice?

Earlier this year, rival ride-hailing platform Gojek implemented a 70¢ platform fee to cover the costs of "initiatives designed to improve the experience for customers and driver-partners".

In its submission to CCCS (PDF file), Grab pointed out that Uber charges a "booking fee" in the United States, Australia, Brazil, and Hong Kong. In the U.S., this booking fee is upwards of US$2 (S$2.76).

This fee, says Uber, covers regulatory, safety, and operational costs, including insurance protection.

Lyft also charges a service fee in the U.S. that starts from US$2 (S$2.76) to support the Lyft Platform and related services, including insurance and background checks.

How do I take part in this public consultation?

You can find out more about the public consultation here. Some factors that the consumer watchdog association would like public feedback on include:

• Whether a platform fee should be allowed to enable Grab to recover the additional cost of its investments into passenger safety and driver benefits
• Whether there are any other considerations that CCCS should take account of in its assessment of the Application.

Interested parties should send their feedback via email to CCCS at [email protected] by August 11, 5pm.

Top image by Joshua Lee